2. Copyright 2010 Cengage Learning Some Definitions Global South: Less-developed countries Global North: Wealthy industrialized countries Third World: Cold War term for Global South First World: Cold War term for Global North democracies Second World: Cold War term for Soviet Union and other communist countries Fourth World: Indigenous peoples 2
3. Copyright 2010 Cengage Learning Global South 3 85% of the World’s People 20% of the world’s wealth
6. Copyright 2010 Cengage Learning Imperialism Late 1400s: Europe used transportation and military technology to conquer colonies Mercantilism: Trade should increase state wealth; increase exports, decrease imports; used to take advantage of colonies 1880s: Final burst colonizes most of Africa China divided into spheres of influence 6
9. Copyright 2010 Cengage Learning Economic Explanations for Imperialism Marxism–Leninism: Capitalists need overseas outlets for surplus capital Liberalism: Result of maladjustments within the capitalist system World-system theory: Capitalist core and dependent periphery 9
10. Copyright 2010 Cengage Learning Political Explanations for Imperialism Hobson: Competition for power and prestige among European states Realpolitik 10
11. Copyright 2010 Cengage Learning Imperialism Declines: 20th Century Self-determination: Woodrow Wilson, Treaty of Versailles League of Nations mandates World War II saps strength of colonial powers, demonstrates that colonial powers can be defeated Decolonization from 1947–1960s Neocolonialism: Continued domination of the Global South by the Global North through economic means 11
12. Copyright 2010 Cengage Learning Global North Democratic Technologically inventive Wealthy Aging populations Low population growth 12
13. Copyright 2010 Cengage Learning Global South Most states: Not democratic Low technology use Poor Rapid population growth Overstrained social and ecological systems 80 percent global population 15 percent global wealth 13
15. Copyright 2010 Cengage Learning How Do We Measure Poverty? Per capita GDP Purchasing Power Parity Basic Human Needs Approach Human Development Index (HDI) Inequality Gini Coefficient Gender Development Index 15
17. Copyright 2010 Cengage Learning Percentage of People Living on Less Than $1 a DayUN Development Goals for 2015 17
18. Copyright 2010 Cengage Learning The Problem of Late Development First Mover Advantages Economies of scale Network effects Investment funds Declining Terms of Trade 18
19. Copyright 2010 Cengage Learning Strategies for Development Today Import-substitution industrialization State socialism Export led growth 19
20. Copyright 2010 Cengage Learning The Asian Tigers South Korea, Taiwan, Singapore, and Hong Kong used export-led growth to move from the world’s poorest countries to the world’s richest in half a century “Go where the money is.” Low cost production based on abundant cheap labor Use profits and expertise gained to move up the food chain 20
21. Copyright 2010 Cengage Learning World Bank and Foreign Aid 1968–1981: Focus on basic human needs approach 1980s and 1990s: Focus on structural adjustment Recently, focus on good governance 21
22. Copyright 2010 Cengage Learning Shortcomings of International Aid Goes primarily to governments Multiplier effect of aid Tied aid 22
23. Copyright 2010 Cengage Learning Multilateral Aid and the World Bank Structure of the World Bank: The U.S. has 16.4 percent of the votes, followed by Japan with 7.9 percent, Germany with 4.5 percent and France and Britain with 4.3 percent each. 163 other members have less than one percent of the vote. 23
24. Copyright 2010 Cengage Learning Some Critiques of the World Bank The voting procedure disenfranchises the poor countries that have the most at stake Lending may leave the recipient with debts, without much benefit Conditionality undermines the sovereignty of recipient governments Conditions often require harsh economic policies 24
26. Copyright 2010 Cengage Learning Modernization Theory Reasons for underdevelopment are internal deficiencies Global South must: Create conditions for efficient production, free enterprise, and free trade Attract investment capital from the Global North Pass through stages of development and reach “take off” Historical conditions that allowed the North to do this in the 19th century do not exist now 26
27. Copyright 2010 Cengage Learning Dependency Theory Reasons for underdevelopment are external Capitalist world economy is based on a division of labor between the industrialized core and underdeveloped periphery Global North keeps Global South poor through: Terms of trade and finance Exploitation by multinational corporations Dualism—rural impoverished sector and urban modernizing sector Has trouble explaining the NICs 27
28. Copyright 2010 Cengage Learning The Global South’s Search for Power Nonaligned Movement Failed states External military intervention Arms acquisitions Preparing for natural disasters 28
29. Copyright 2010 Cengage Learning The Global South’s Search for Prosperity (1 of 3) Import-substitution industrialization Export-led industrialization New International Economic Order (1974) Pushed by Group of 77 Called for changes in the international economic system that would benefit development in the Global South and redistribute some global wealth to it Most were rejected by the Global North 29
30. Copyright 2010 Cengage Learning The Global South’s Search for Prosperity (2 of 3) Regional trade regimes: NAFTA: North American Free Trade Agreement Mercosur: Argentina, Brazil, Paraguay, Uruguay APEC: Asia-Pacific Economic Cooperation ASEAN: Association of Southeast Asian Nations SADC: Southern African Development Community 30
31. Copyright 2010 Cengage Learning The Global South’s Search for Prosperity (3 of 3) Trade, Aid, Investment, Debt Relief Bilateral aid: official development assistance Multilateral aid: World Bank Conditionality Foreign direct investment (FDI) Multinational corporations (MNCs) Heavily indebted poor countries (HIPCs) 31
32. Copyright 2010 Cengage Learning The Washington Consensus Free market approach is optimal Other approaches: Developmental state The Post-Communist Experience Emerging Consensus: Embraces both the developmental state and the free market 32
33. Copyright 2010 Cengage Learning Two Rankings of Global North Countries’ Aid to the Global South 33
Typically, Global South countries have been unable to develop an indigenous technology appropriate to their own resources. Research and development expenditures are directed at solving the Global North’s problems.
Higher population growth rates in the Global South have contributed to widespread poverty. Global South countries are home to 85% of the world’s population, but only 20% of its wealth.
In the late 19th century, the majority of Africa fell under control of seven European powers: Belgium, Great Britain, France, Germany, Italy, Portugal and Spain.
In 1914, Great Britain was the preeminent imperial power and expanded its empire to cover one-fifth of the earth’s land area and one-fourth of its population.
Lenin authored Imperialism, The Highest State of Capitalism. He was the Bolshevik leader of the 1917 October Revolution in Russia, and the first head of state of the Soviet Union.
British consent to the independence of Pakistan and India in 1947 accelerated decolonization.
Global South states with an abundance of fossil fuels to consume and export are notably wealthier than others, particularly the twelve members of the Organization of Petroleum Exporting Countries (OPEC). The wealth of three of these countries, Kuwait, Qatar, and the United Arab Emirates, are equal to or exceed the standards of some Global North countries.
A Gini coefficient is a statistic developed by Italian statistician Corrado Gini to compare the incomes of the top and bottom fractions of a society. The number “1” represents a situation in which one person has all the income and everyone else has none; and “O” represents a situation in which everyone has equal income.
Many Global South economies are dependent upon raw materials and primary products for export, and are particularly vulnerable to global recessions.
Tied aid exists when a donor country insists upon requiring purchases from the donor countries with aid dollars. Motivations for the donor countries are usually both economic and political.
The World Bank is headquartered in Washington, DC. The president of the World Bank is traditionally a U.S. national, and is nominated by the United States, the largest shareholder of 186 member countries.
